Independence, Rule by the Army

Paz Estenssoro, Partido Revolucionario, Banzer, Bolivian army, Zuazo

By the mid-1960s the MNR occupied the center in Bolivian politics. The MNR made economic concessions to the IMF to encourage international investments. These concessions cost the party the support of many of the miners who formed the backbone of the independent militia that had supported the revolution. Many miners withdrew from the MNR to form the Revolutionary Party of the Nationalist Left (Partido Revolucionario de la Izquierda Nacionalista, or PRIN). Opposition to the Paz Estenssoro government increased on the left and the right.

The Bolivian military, weakened since the revolution, reasserted its place in Bolivian politics and overthrew Paz Estenssoro in 1965. A military junta used force to suppress the opposition of the miners and the mine unions. General Rene Barrientos Ortuno, a member of the junta, was elected president in July 1966. Although he retained most of the revolution’s programs, in the ensuing two years, the military government reopened tin-mining operations to private and foreign investment.

Barrientos, who was elected to the presidency as a civilian, relied heavily on armed force to put down Communist-led guerrilla movements concentrated in the mountainous mining regions. The Bolivian army reportedly smashed the rebel forces in October 1967 in a pitched battle near the village of Vallegrande. Che Guevara, aide to Cuban premier Fidel Castro, was captured in that encounter and was executed shortly afterward. Barrientos died in a helicopter crash in April 1969, and a series of short-lived governments followed, most headed by military leaders.

In August 1971 a coup supported by the right and the center brought Colonel Hugo Banzer Suarez to power. With business support, Banzer ruled as president for seven years. His regime attracted foreign investment, and in the mid-1970s it also benefited from increased earnings from tin and oil. However, it continued to face opposition from workers and students. In 1972 Banzer invoked martial law. He also silenced many political opponents and suppressed protests by peasants. After an abortive coup in 1974, Banzer suspended all political parties, trade unions, and student groups.

Banzer stepped down in 1978 pending restoration of civilian government, but elections in 1979 and 1980 were followed by renewed military intervention. By 1982 the country’s earnings from tin production had declined, and foreign debt continued to rise. During this time, the illegal export of cocaine from Bolivia began to thrive. The United States pressured Bolivia to take decisive steps against the drug traffic.

In July 1980 General Luis Garcia Meza seized power, suspended the constitution, and instituted a repressive regime. Many politicians, labor leaders, and military men who opposed Garcia Meza were arrested and killed, and many more fled abroad. The government closed the universities. Cocaine—already the major source of export and peasant incomes—became a major source of income among government officials. Drug traffickers paid bribes to judges, politicians, and military officers in exchange for protection from prosecution and the ability to trade drugs without interference. The army ousted Garcia Meza in August 1981, and moderate army leadership held power until elections were held in October 1982.

Former president Hernan Siles Zuazo was installed as president; he faced several cabinet crises and could not resolve economic problems caused by Bolivia’s huge foreign debt. Presidential elections in 1985 returned Paz Estenssoro to the presidency. With backing from the IMF, Paz Estenssoro immediately imposed a drastic deflationary program. A new currency unit, the boliviano, was introduced to replace the near-worthless peso at the rate of 1 to 1 million. Paz Estenssoro’s administration slashed government employment and subsidies and closed most of the tin mines, which were considered unprofitable. The resulting strikes and demonstrations were repressed. Unemployment and poverty soared, but the rate of inflation was reduced to less than 20 percent per year. By 1988 a modest economic recovery had begun. The government attempted to cut down coca production and the sale of cocaine. It was aided by a contingent of U.S. troops from July to November 1986, but the efforts were only partially successful and were very unpopular.